Portugal Set to Receive Final Bids from Air France-KLM, Lufthansa for TAP
Overview of TAP Privatisation and Bidding Process
LISBON, July 29 (Reuters) - Portugal is set to receive binding bids on Wednesday from Air France-KLM and Lufthansa for a minority stake in TAP, kicking off the final battle for one of Europe's few remaining standalone flag carriers.
Lisbon relaunched TAP's long-delayed privatisation in July 2025, aiming to sell a 44.9% stake to a strategic airline partner capable of boosting the carrier's global reach and competitiveness.
The government has said that TAP needs to be part of a larger airline group, warning that EU state-aid rules prevent further public funding and leave the company vulnerable to future global shocks.
The Final Bidding Stage
Air France-KLM and Lufthansa emerged as the sole contenders after submitting non-binding offers in April, with the government describing both proposals as "largely equivalent and very ambitious" in strategic, industrial and financial terms.
Binding offers are due by 5 p.m. (1600 GMT) on Wednesday.
Europe's Airline Consolidation Wave
Lufthansa's Expansion
TAP has become the latest target in Europe's airline consolidation drive.
Lufthansa this year acquired a 41% stake in Italy's flag carrier ITA Airways, adding it to a stable that includes SWISS, Austrian Airlines and Brussels Airlines.
Air France-KLM's Growth
Air France-KLM has expanded through investments including Scandinavian airline SAS.
Strategic Interests of the Bidders
Both groups have said they were interested in buying, and that their track record of integrating airlines while preserving their brands and hubs would help secure TAP's long-term future.
Beyond the Highest Bid
TAP's Strategic Value
TAP's main attraction is its prized and lucrative slots linking its Lisbon hub with Brazil, Portuguese-speaking African countries and the U.S., key routes for Portugal's diaspora, tourism and investment.
Government's Broader Objectives
Unlike a conventional privatisation, Infrastructure Minister Miguel Pinto Luz said this month that "this is a strategic decision that should not be reduced to price alone".
Regional Growth and Connectivity
The government wants TAP's next partner to back growth across Portugal, strengthening operations and connections not only in Lisbon but also in Porto, Faro, the Azores and Madeira.
Valuation and Bid Details
Bernstein analysts valued TAP's 44.9% stake at around €700 million ($798 million), based on a valuation of €1.5 billion for the entire airline. The government has not disclosed the non-binding bids' values.
($1 = 0.8774 euros)
(Reporting by Sergio Goncalves; Editing by David Latona and Jan Harvey)